The global gold market is undergoing a significant correction. On Tuesday, June 22nd, spot gold prices plummeted 1.9%, hitting $4,110.05 per ounce, while the U.S. August gold futures contract closed down 1.3% at $4,149.40. This decline is not an isolated event but the combined result of a strong U.S. dollar rebound, an unexpected easing of Middle East geopolitical tensions, and a hawkish shift in the Federal Reserve's monetary policy. Gold, once seen as a safe-haven asset, is now facing multiple pressures, with investor confidence showing clear signs of wavering.
Where to begin
From a current chart perspective, international gold remains under sustained selling pressure, with a solid overall bearish structure and severely limited room for a rebound. The technical picture is weak across the board. On the daily chart, moving averages are arranged in a bearish pattern, with the gold price recently suppressed below the moving averages of various periods. On the four-hour chart, repeated attempts to rally are met with sell-offs, with each minor recovery accompanied by concentrated selling pressure. The resistance zone between $4,120 and $4,150 above is difficult to break through effectively, while $4,025 below serves as a strong short-term support level. A breach of this support would open the door for further downside. Although indicators have briefly entered oversold territory, suggesting a technical need for a correction, bullish momentum is lacking, and any bounce is likely to be minor and technical in nature. The short-term market's bearish tone is difficult to change. The preferred strategy is to look for selling opportunities on rallies, while being cautious about attempting to buy the dip. The key focus is to observe the defensive strength at support levels.
Summary of recommendations
Based on the above analysis, it is suggested to consider short positions near $4,100, with a stop-loss above $4,120, targeting a move down towards the $4,050 area.
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